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Mobile Phone Shipments Shrivel As Credit Tightens

Weak handset sales in the last quarter of 2008 are proving to be a grim harbinger of even slower sales in 2009 says a new report.
The global economic slowdown is finally catching up with mobile phone handset shipments, which grew in 2008, but are predicted to fall 9% in 2009, according to a report Friday by Strategy Analytics.

In addition to tightening attributed to the global economic problems, shipments were affected by slower sales as retailers moved inventory and as consumers delayed purchases. Tight credit also contributed to the shrinking sales, Strategy Analytics added.

Prepared by analyst Neil Mawston, the report noted that the weak handset sales in the last quarter of 2008 are proving to be a grim harbinger of even slower sales in 2009. "Just 295 million cellphones were shipped worldwide in Q4 2008, down a significant 10% from 329 million units a year earlier," according to the report. "An economic downturn in developed and emerging markets caused the industry's weakest growth rate since 2001."

The report seemed to track Nokia's report earlier this week in which the Finnish-based company said its market share had dropped to 37% from 40%. Strategy Analytics said Nokia had shipped 113 million handsets in the fourth quarter and its weakness was attributed to its weak smartphone offerings and to slow overall sales in China. Nokia, however, has said it expects to resume its market share growth during the latter part of 2009.

The two leading Korean providers -- Samsung and LG -- each are expected to see slowing handset sales, but at rates less than other providers.

"Three of the top 5 handset vendors grew at negative rates," Strategy Analytics said. "Samsung performed best, grabbing an 18% global share. Nokia, Sony Ericsson and Motorola continued to disappoint. Full-year shipments for the industry grew just 5% in 2008, to 1.18 billion units."